search
Homeweb3.0This Is Why Altcoin Investors Struggle Despite Bitcoin, Ether Sitting Near Yearly Highs

Constantly diluting supply with token unlocks, selling pressure from venture funds, lack of fresh inflows to crypto and seasonal trends all contributed to the brutal drawdown in altcoin prices.

This Is Why Altcoin Investors Struggle Despite Bitcoin, Ether Sitting Near Yearly Highs

The cryptocurrency market has seen a healthy consolidation after a massive run-up from October to March – at least for those who invested in the two largest digital assets.

Those who hold smaller cryptocurrencies, however, are experiencing a brutal correction, with sentiment in crypto social media circles bearing a striking resemblance to the despair of a bear market.

While bitcoin (BTC) and Ethereum's ether (ETH) are only 15% below their yearly highs, several crypto majors like solana (SOL) and avalanche (AVAX) are down 40% to 50% from their March peaks, and layer-1 challengers sui (SUI) and aptos (APT) have cratered 60% to 70%.

Selling pressure from venture funds with broadening supply and token unlocks, a lack of fresh inflows to crypto and seasonal trends have all contributed to the weakness in altcoins, a term used to describe cryptocurrencies beyond the biggest ones like bitcoin and ether.

Many altcoins experience a constantly diluting supply of tokens via unlocks and distributions scheduled for years ahead. This is because most of the tokens are locked up, bought by early investors or earmarked for ecosystem developments and grants.

For example, Ethereum layer-2 network Arbitrum's token (ARB) is nearing its all-time low price from last September, even though its market capitalization has risen to $2.5 billion from $1 billion because of a massive increase in its supply.

Another example is solana, whose supply is inflating by 75,000 tokens, worth some $10 million at current prices, every day.

"Unlike equities which have a constant passive bid from ETF inflows and bond buybacks, crypto, and in particular altcoins, have the opposite – a constant stream of sell pressure," Quinn Thomson, founder of crypto hedge fund Lekker Capital, noted in an X post.

A significant portion of the selling pressure comes from venture capital funds realizing profits on their early investments in projects launched over the past years.

"Venture capital funds invested $13 billion in Q1 2022, while the market turned into a steep bear market," Markus Thielen, founder of 10x Research, said in a report earlier this week. "Those funds are now under pressure from their investors to return capital as artificial intelligence (AI) has become a hotter theme."

When the market's appetite for the smaller, more speculative crypto assets is dwindling and trading volumes are falling – like in the past few months – there's not enough demand to absorb this supply shock.

Liquidity inflows to crypto markets have also stalled or even reversed over the past weeks, shown by the market value of stablecoins, which are mostly used as an intermediary for crypto trading.

The combined market capitalization of the four largest stablecoins – Tether's USDT, Circle's USDC, First Digital's FDUSD and Maker's DAI – has been flat since April after a $30 billion expansion earlier this year, per TradingView data.

Stablecoin balances on exchanges – which translates to dry powder for traders and investors – decreased $4 billion to the lowest level since February, David Shuttleworth, partner at Anagram, pointed out in an X post citing Nansen data.

"This has particularly bad implications for tokens with large upcoming unlocks as well as new [tokens] and airdrop programs," Shuttleworth said.

Recently launched tokens of blockchain bridge Wormhole {{W}}, yield-bearing synthetic dollar protocol Ethena {{ENA}} and layer-2 network Starknet (STRK) all plummeted roughly 60% to 70% in price from their respective highs and will face billions of dollars worth of tokens being distributed in the coming years.

Seasonal trends have been also bearish for smaller tokens, with June usually being a down month for altcoins.

TradingView data shows that the aggregated market cap for crypto assets excluding BTC and ETH, captured by TOTAL.3 metric, saw a decline in every June during the past six years.

This month is on track to be no exception, with TOTAL.3 down 11% to date.

News source:https://www.kdj.com/cryptocurrencies-news/articles/altcoin-investors-struggle-bitcoin-ether-sitting-yearly-highs.html

The above is the detailed content of This Is Why Altcoin Investors Struggle Despite Bitcoin, Ether Sitting Near Yearly Highs. For more information, please follow other related articles on the PHP Chinese website!

Statement
The content of this article is voluntarily contributed by netizens, and the copyright belongs to the original author. This site does not assume corresponding legal responsibility. If you find any content suspected of plagiarism or infringement, please contact admin@php.cn
The latest ranking of the top ten virtual currency trading platforms The latest ranking of the top ten virtual currency trading platforms appsThe latest ranking of the top ten virtual currency trading platforms The latest ranking of the top ten virtual currency trading platforms appsMay 15, 2025 pm 06:09 PM

The latest rankings of the top ten virtual currency app trading platforms: 1. OKX, 2. Binance, 3. Huobi, 4. Coinbase, 5. Kraken, 6. Bitfinex, 7. Bittrex, 8. Poloniex, 9. Gemini, 10. KuCoin. These platforms all provide a variety of digital asset trading services, support spot, futures and leveraged trading, and provide staking and lending services. The user interface is simple and mobile application functions are powerful.

What are the income stablecoins? 20 types of income stablecoinsWhat are the income stablecoins? 20 types of income stablecoinsMay 15, 2025 pm 06:06 PM

If users want to pursue profit maximization, they can maximize the value of the stablecoin through profit-based stablecoins. Earnings stablecoins are assets that generate returns through DeFi activities, derivatives strategies or RWA investments. Currently, this type of stablecoins accounts for 6% of the market value of the US$240 billion stablecoins. As demand grows, JPMorgan believes that the proportion of 50% is not out of reach. Income stablecoins are minted by depositing collateral into an agreement. The deposited funds are used to invest in the income strategy, and the income is shared by the holder. It's like a traditional bank lending out the funds deposited and sharing interest with depositors, except that the interest rate of the income stablecoin is higher

What is PIN AI? Interpretation of PIN AI financing, application, protocol economy, architectureWhat is PIN AI? Interpretation of PIN AI financing, application, protocol economy, architectureMay 15, 2025 pm 06:03 PM

What is PINAI? How is PINAI financing? How does PINAI innovate data privacy? Learn how PINAI solves the problem of digital identity fragmentation and provides truly personalized AI services through its decentralized architecture. Explore the advantages of secure edge computing and trusted execution environments (TEEs) in data privacy. Below, the editor of Script Home will introduce you in detail what PINAI is? and PINAI financing situation. Friends in need, let’s take a look! In today's digital world, personal data is scattered on the platforms of major technology giants, making it difficult for users to control their data. Current AI applications

oE Exchange app official download latest version oE Exchange official latest APP download linkoE Exchange app official download latest version oE Exchange official latest APP download linkMay 15, 2025 pm 06:00 PM

oE-East Exchange app is one of the most popular digital currency trading platforms in the market at present, attracting a large number of users with its efficient and secure trading environment. Whether you are an experienced trader or a new investor, the oE-East Exchange app can provide you with a convenient trading experience. This article will introduce you in detail how to download and install the latest version of the oE Exchange app. Please note that the download links provided in this article are official links, and using these links can ensure that you download the safest and latest version.

Binance Alpha is launched, HAEDAL airdrop value analysisBinance Alpha is launched, HAEDAL airdrop value analysisMay 15, 2025 pm 05:57 PM

HAEADL is the token of Sui's ecological liquidity staking protocol Haedal, and has been confirmed to be launched on Binance Alpha and Bybit spot. Haedal announced in January that it had completed a seed round of financing, with the specific amount not disclosed. Investors participating in this round of financing include Hashed, Comma 3Ventures, OKXVentures, AnimocaVentures, Sui Foundation, FlowTraders, Dewhales Capital, Cetus, Scallop, etc. also,

Cryptocurrency analyst PlanB: Ethereum is a junk coin! The degree of centralization is far greater than that of BitcoinCryptocurrency analyst PlanB: Ethereum is a junk coin! The degree of centralization is far greater than that of BitcoinMay 15, 2025 pm 05:54 PM

Cryptocurrency analyst and Bitcoin Stock-to-Flow (S2F) model developer PlanB strongly criticized Ethereum (ETH) on social platform X on April 20. He retweeted a tweet published by Ethereum founder Vitalik Buterin in June 2022 (which criticized the S2F model at the time) and took this opportunity to fight back Ethereum, calling it a junk coin that is "centralized, pre-mined, proof of stake (PoS) and arbitrary changes in supply plans." PlanB said in a tweet: Ethereum looks really bad now. I know schadenfreshing is a bit rude, but I think it's like Ether

Tesla's worst revenue in three years! Return to prevent blood and improve one's business: it will reduce the work in DOGETesla's worst revenue in three years! Return to prevent blood and improve one's business: it will reduce the work in DOGEMay 15, 2025 pm 05:51 PM

Tesla's financial report hit its worst performance in three years. Musk took advantage of the situation and announced that he would reduce his work in the White House DOGE (Government Efficiency Department) department and focus on his "profession". Tesla's worst revenue in three years! Return to prevent and replenish blood to improve one's business: It will reduce its work at DOGE Tesla's revenue is "the worst in three years". US President Donald Trump has issued a big knife to the world with tariffs. It is expected to import all auto parts in May, with a 25% tariff. Even his good friend and good colleague Tesla Musk cannot avoid this whirlwind. Musk, who has always been confident, is in the latest

The world's largest exchange registration portal (Huobi Edition)The world's largest exchange registration portal (Huobi Edition)May 15, 2025 pm 05:48 PM

As the world's leading digital asset trading platform, Huobi Global has developed into one of the world's largest cryptocurrency exchanges since its establishment in 2013. Huobi is committed to providing users with safe and convenient digital asset trading services, supporting the transaction of a variety of mainstream cryptocurrencies, including Bitcoin (BTC), Ethereum (ETH), Litecoin (LTC), etc. Huobi's users are spread all over the world, with a strong technical team and strict security measures to ensure the security of users' assets and transactions.

Hot AI Tools

Undresser.AI Undress

Undresser.AI Undress

AI-powered app for creating realistic nude photos

AI Clothes Remover

AI Clothes Remover

Online AI tool for removing clothes from photos.

Undress AI Tool

Undress AI Tool

Undress images for free

Clothoff.io

Clothoff.io

AI clothes remover

Video Face Swap

Video Face Swap

Swap faces in any video effortlessly with our completely free AI face swap tool!

Hot Article

Hot Tools

Safe Exam Browser

Safe Exam Browser

Safe Exam Browser is a secure browser environment for taking online exams securely. This software turns any computer into a secure workstation. It controls access to any utility and prevents students from using unauthorized resources.

DVWA

DVWA

Damn Vulnerable Web App (DVWA) is a PHP/MySQL web application that is very vulnerable. Its main goals are to be an aid for security professionals to test their skills and tools in a legal environment, to help web developers better understand the process of securing web applications, and to help teachers/students teach/learn in a classroom environment Web application security. The goal of DVWA is to practice some of the most common web vulnerabilities through a simple and straightforward interface, with varying degrees of difficulty. Please note that this software

VSCode Windows 64-bit Download

VSCode Windows 64-bit Download

A free and powerful IDE editor launched by Microsoft

SublimeText3 Chinese version

SublimeText3 Chinese version

Chinese version, very easy to use

SublimeText3 Mac version

SublimeText3 Mac version

God-level code editing software (SublimeText3)